AgriVisor Afternoon MarketWatch

Tuesday, January 12, 2016
***** Corn futures up 4 3/4 to 5 cents; soybeans up 13 1/4; Chicago wheat higher by 10 1/2 to 12 1/4 as Kansas City wheat gains 17 1/4 to 18 1/2. ***** 

   # Grains finish higher after traders digest the crop reports.
   # Corn yield is cut by 0.9 bushels per acres as soybean yield drops 0.3 bpa.  Lower corn production is more than offset by a 50 million bushel cut to the export target and carryout therefore rises slightly.  Lower soybean yield combines with 600,000 fewer harvested acres to reduce carryout by 24 million bushels.    
   # Quarterly stocks come in a touch under the average trade guesses for both corn and soybeans, but the numbers are still high at 11.2 and 2.715 billion bushels, respectively.      
   # Minimal changes are made to the world production estimates.  Output for Brazil and Argentina, both corn and soybeans, are unchanged from the December WASDE.  World ending stocks for both corn and soybeans drop 3 million metric tons apiece.  The soybean drop is had on the back of the U.S. crop reduction while world corn stocks drop on a smaller South African crop.        
   # The Winter Wheat Seedings report is the most bullish release of the day.  All winter plantings are estimated at 36.6 million acres for 2016, well under the 39.3 million that traders had expected.  The drop in sowings is a 7 percent reduction on last year’s acres.   
   # Grains rally, mostly because traders see nothing that’s overly bearish.  The report triggers some profit-taking from a fund crowd that comes into the numbers with a record grain short on.    
   # End of day technical action is not overly bullish as corn and soybeans come off their session highs.  March corn is turned away from its 20-day moving average.  March soybeans are turned away from their 100-day, but settle above the 20- and 50-days.       
   # Grains are able to decouple from outside market influences for the day, but will still face pressures from falling oil, strong dollar, shaky equity markets.    

***** Live cattle fractionally mixed as feeders gain fractionally in the front of the curve and lose fractionally in the back; hog futures gain $1 to $2.25.  ***** 

   # Report day has little to say for the meats.  Supply and Use and Quarterly Production estimates are left largely unchanged.  Cattle futures are pressured as cash market optimism runs dry but hogs enjoy support from improved cash and wholesale prices.